Reading Headlines is Not Enough

Just for fun, I looked back at a list I made in February of 2016, a mere one year ago. The political situation had started to heat up by then, and a lot of Internet gurus were happily sharing their “financial wisdom” with all of us. Reading the list today was even more fun than I thought it might be, so I decided to share some of the better headlines. Perhaps it may be a good learning experience.

In February of 2016, my favorite headline came to us on a Sunday, from a source I will not judge, as it speaks for itself. The simple headline read, “Sell Everything.” He went on to explain that the markets should be down massively, but investors seem to have been hypnotized that nothing can go wrong. He even suggested selling bonds, your home and your children.

On Monday, we were treated to the claim, “2016 Federal Rebate Pays Off Your Mortgage.” This referred to a tax law change making permanent the deductions for sales tax in states that have no income tax (in those states, we have been receiving the deduction for years, but it was always renewed on a 1-year at a time extension). I will spend my tax savings as I please, thank you, and it may not be my choice to pay down my mortgage. And by the way, this same headline reappeared this week (2017).

Then came Tuesday’s peach, counseling us that, “If you want to retire, don’t invest in stocks.” This was from a guy who was selling market futures, from which I conclude that his impartiality is questionable.

Wednesday would not be outdone, so we read that, “Oil in Bear Territory: Short Oil and Energy ETFs.” USO, which tracks the price of oil, is up about 40% year-over-year.

Thursday’s revelation was that one clairvoyant market master had, “Indisputable Evidence That Gold is Going to $750.” Today, gold is about 65% higher the $750. Enough said?

And Friday we were treated to the suggestion that we may be tired of, “Watching Real Estate Prices Plummet.” In the year since the headlines, real estate prices have generally risen, and in many areas by about 7%. I am not tired of watching that trend, are you?

We closed the week on Saturday by learning that 2016 would bring us, “The End of Social Security in 2016.” I have been getting my benefit payments so far in 2017, and expect that continue for a very long time.

From these pearls of wisdom, I conclude that reading headlines could be destructive to your investing results. If you pay attention only to the eye-grabbing leads, you may not understand that there is more to these stories. Either read carefully and completely, or perhaps better yet, simply ignore the sensationalism.